back to article Screwball ruble closes Apple's Russia store, whole kit and caboodle

Apple has temporarily halted online sales in Russia while the country remains in an economic free-fall. The iPhone giant said "extreme" fluctuations in the value of the ruble forced it to shut its shopping website in the Putin-led country. Apple said it will review its pricing before reopening the site for sales. The ruble …

  1. A Long Fellow

    That picture...

    I must be tired AND showing my age, but that picture just slammed me into a Tetris flashback.

    1. P. Lee Silver badge

      Re: That picture...

      Think yourself lucky - Tetris gave me a flashback: I was there when Brezhnev was in power.

  2. Anonymous Coward
    Meh

    On a more serious note...

    ...how's this likely to affect the IISS recrewing and supply missions, given that the most reliable ones of late have been from the good ole' USSR - I mean, Russia?

    1. Yet Another Anonymous coward Silver badge

      Re: On a more serious note...

      It's cheaper to fill the tank ?

    2. Voland's right hand Silver badge

      Re: On a more serious note...

      Badly.

      Even if the economics did not affect it, the current sanctions bill awaiting Obama's signature is likely to cause complete termination of any cooperation on any project anywhere - basically, we will be back to Andropov's days.

      It is also likely to drag Europe back into recession too. Ditto for China, at which point we will be back to 2007 economic state if not worse. Actually worse - that was a paper crash, while this one will be a fully blown structural.

      The really bad part of it - Putin emerged out of the previous crisis like this - economics + Chechen war (a lot of which was actively sponsored by the West too). The Chechen war was The Day Democracy Died for Russia. If we did not sponsor "freedom fighters" that took bus hostages in Southern Russia on a weekly basis, used pregnancy ward patients as human shields and dead-man-switch rigged schools... Well... things may have developed differently over there. We are reaping what we sawed. Literally.

      I would not like to think what will emerge now and frankly he was spot on in his interview at the 20 summit in Melbourn - some people are playing with fire without understanding the full consequences of what they are doing.

      1. I ain't Spartacus Gold badge

        Re: On a more serious note...

        What a load of old tosh!

        Fistly the Rusian ecnomy isn't all that big, compared to the rest of the world. In normal times a collapse like this would be only a tiny blip. In these fevered times it's possible that it could start an emerging market meltdown, that plunges the world back into recession. On the other hand, there was always going to be a withdrawal of liquidity from emerging markets, because the US have stopped doing QE. This has been happening for months, with the odd big blip in the market, but so far no collapse. What makes things easier now is that the oil price has collapsed. So although Turkey is getting hit now, it will probably recover, because its oil is only costing half as much, and it's able to produce lots of exports. Whereas 70% of Russia's exports are oil/gas, and that's just halved in value. So they've taken a 35% hit in export value over about 3 months. Painful. Not to mention that Russia's main gas market (the EU) has cut it's demand for Russian gas by a third this year, as liquid natural gas has got cheaper and more plentiful, and trust in Russia has collapsed.

        There is a problem for emerging market countries that have heavily borrowed in dollars, while they were cheap, as the dollar is now heading north, so repaying their loans will cost more. Russia being one of these countries. That's one of the main worries about the global economy - after the continuing Eurozone clusterfuck.

        But the economic impact of Russia's problems on the EU is minimal. Germany is the biggest trading partner. I really can't see Russian problems causing China anything more than a blip.

        As for sanctions ending cooperation, I doubt it. This crisis should be reinforcing to the Russian government that they actually need the West. They chose to align their economy more with the international one, after the Soviet experiment in going it alone turned out not to work so well. They've done quite well out of it, and this is a good sign of the costs of saying fuck-you to everyone else. Whether that's a sign Putin and co will choose to ignore, I can't judge. I used to think he was a very rational calculator - but his actions in the Ukraine looked like some pretty short-termist gambling, that's turned out horribly badly. So maybe he's not so rational after all?

        Anyway the Russians like their imports now. So they'll probably want hard currency. And the ISS gives them hard currency, while supporting their hi-tech space industry. Apparently that now uses a lot of foreign-made parts, which have just doubled in price. So the ISS cash ought to be welcome. The profit on that has just also doubled, as they get paid in hard currency, so can buy the parts, but then that gets twice as many roubles, so can give all their suppliers and staff a pay rise (to cushion inflation), whilst still improving profits. Exports are yummy when your currency collapses, and not to be lightly spurned.

        As for sanctions, even the new ones Congress have passed are all still pretty minor. The US and EU have been very careful to only use the most limited sanctions, to make a point. They didn't aim to have this catastrophic effect (even though they always could have), but to ramp up the pressure slowly and give Putin space and time to back down. A lot of what Congress has passed gives Obama the power to impose new sanctions, which he doesn't have to use. In my opinion it would be worth offering Russia a deal to help prop up the Rouble now. The problem is Putin has lied and broken so many deals over Ukraine, that it's hard (probably pointless) to give him the reward before he's actually delievered on the promise. I guess we could just do it anyway, and hope for the best - and it's also a good way of giving confidence in the other emerging markets under attack.

        By the way, we didn't sponsor the Chechen fighters. The West were specifically also worried about islamist fighters training in Chechenya - which is why we didn't protest about the hideous Russian human rights abuses there (which made Iraq look like a picnic in comparison). There was a hell of a lot of security cooperation with Russia (particularly in Central Asia), as the US in particular were keen to build a closer relationship with Russia, precisely so this kind of stuff didn't end up happening. The Russians created their own terrorist problem in Chechenya with no help from anyone else at all. Although I'm sure the usual suspects in the Middle East were funding the jihadis, as have been in Pakistan, Syria, Libya etc.

        I would not like to think what will emerge now and frankly he was spot on in his interview at the 20 summit in Melbourn - some people are playing with fire without understanding the full consequences of what they are doing.

        That is certainly true. Putin has now invaded two of his neighbours and effectively annexed some of their territory. In the case of Crimea, explicitly so. And that's something that's not happened in Europe since WWII. Even the Germans, who's foreign policy consensus has been built on trying to build bridges with Russia since the 1960s, have taken a step back and decided to try another tack.

        Putin has crossed a line from being prickly, hard to deal with and (possibly over-) protective of Russian interests - to looking like an outright threat to the territorial integrity of some of his neighbours. And we have military alliances with some of them. He's also playing with fire diplomatically by doing stupid things like lying about using Russian troops to annex Crimea and in Ukraine. Then doing deals on ceasefires, while sending in more troops and arms and lying about it. This is the worst kind of Kevin-the-teenager type of diplomacy. Perhaps he thinks it's funny to face people down and outright lie to their faces. But how do you make peace with people who can't trust you? If you break treaties and agreements then no-one will give you a concession before you've delivered on your half of the bargain first. And this is very hard to stomach and embarrassing. And embarrassment is something that dictators can't take much of, because dictators maintain their power by the illusion of invincibility. Once that goes, no-one's scared of the threats any more. And then you can no longer make the odd example, you have to go and massacre or imprison thousands of people in order to stay in power. And that's bad for the self-image. If you're still playing the democrat, father of the nation role (and after all he can probably still genuinely win elections), it really hurts the self image to have to send in the troops to stay in charge. Also trust is vital in economics too, not just diplomacy. And Putin's regime aren't trusted. That's why the rouble collapse. Everyone wants to get their money out of Russia, where it's safe from being stolen.

        I always thought Putin was Bismarck. Not a believer in democracy, but willing to use it, and subvert it just enough to stay comfortably in power. While keeping the people on-side with a mix of nationalism and improving the economy. Also a rational and seasoned political / diplomatic operator. That was certainly the mark of his first 2 terms as President. Now he seems to have lost the plot.

    3. I ain't Spartacus Gold badge

      Re: On a more serious note...

      ...how's this likely to affect the IISS recrewing and supply missions

      Roger Stenning,

      They apparently get lots of their parts from abroad now. The space industry supply chain is much more international than it was 20 years ago. I guess that was one of the aims of the ISS project?

      But that's OK. As they also get paid in foriegn currency for foreign astronauts. So they can buy those parts with that hard currency, and then when they convert the remainder to devalued Roubles to buy the Russian bits of the rockets, they get a huge extra boost of spending power.

      This leads me to think they'll stay with the ISS program, as it gives them good publicity, prestige and hard currency. That also subsidises Roscosmos, and helps pay for now expensive foreign rocket parts for the military side of space. I guess they can also start producing more of their own parrts again, as it'll now be cheaper to produce in Russia. And it's not as if they don't still have the skills.

      1. ZanzibarRastapopulous

        Re: On a more serious note...

        tl;dr

        1. I ain't Spartacus Gold badge
          Paris Hilton

          Re: On a more serious note...

          ZanzibarRastapopulous,

          Not sure why you choose to advertise your short attention span, and/or lack of ability to comprehend complex arguments. But whatever floats your boat...

  3. DougS Silver badge

    Apple has a tiny share in Russia

    I think I remember seeing something a couple years ago that they had a 1% share there. And I'm not sure whether that was the smartphone or mobile market...

    So this is an easier move than it would be if this was Japan...

    1. Phil O'Sophical Silver badge

      Re: Apple has a tiny share in Russia

      Can't Apple Russia just price/sell iPhones in dollars? It's just the sort of thing a status-conscious фанат would love to boast about.

      1. David Hicklin

        Re: Apple has a tiny share in Russia

        Nah, Putin's made it illegal to sell in anything other than rubbles...

        1. DougS Silver badge

          Re: Apple has a tiny share in Russia

          I suppose only the rich will be interesting in buying iPhones (or any high end smartphone) right now because the poor never were going to and the middle class is busy being worried that the ruble might make it too expensive to eat next month.

          The rich have the means with international credit cards or whatever to buy an iPhone in another country and have it shipped to them, so they don't care whether Apple has a Russian site or not.

  4. Anonymous Coward
    Anonymous Coward

    In Soviet Russia, only Putin can have apple.

    1. Anonymous Coward
      Anonymous Coward

      In soviet Russia apple bites you.

  5. thames

    Not just the Rouble

    The Venezuelan Bolivar and the Nigerian Naira are in a bit of a swoon as well. Anybody who relies too much on oil exports and doesn't have loads of foreign reserves socked away in the bank is going to be getting it straight in the pocket book about right now.

    The Canadian dollar has taken about a 10% hit so far even though oil exports aren't such a big deal here. I don't pay much attention to the prices of Apple kit, but I wonder if they've been jacking up the prices here yet.

  6. big_D Silver badge

    One-to-One?

    I remember a time when a $2,000 Mac would cost £4,000 in the UK!

    1. Anonymous Coward
      Anonymous Coward

      Re: One-to-One?

      Back in the 1980's most US companues used an exchange rate of

      $1 == £1

      And then you add VAT onto that. and that was when there was £1 == $2.00

      I know we love to hate BT but they threatened the company I worked for to buy all their kit from us via their US Subsidiary. In the end, we caved in and made the UK pricelist use a more realistic exchange rate. As a result, everyone of our customers won. Ironically, we sold a lot more kit as well :)

      1. Anonymous Coward
        Anonymous Coward

        Re: One-to-One?

        Where I used to work when we first started to buy Sun workstations we were allowed to use the "US pricelist + 25%" which was markedly cheaper than the UK pricelist. Also the Sun salesman strongly recommended that we didn't buy their memory expansion cards and pointed us to a third party who sold equivalents at well less than half the price Sun quoted! (Not quite as extreme as a DEC salesman who told someone trying to order a microvax that for the job they wanted it for then a cheap PC plus an Ethernet card was a better solution and there was no need to buy anything from him)

        1. Anonymous Coward
          Anonymous Coward

          Re: One-to-One?

          Not quite as extreme as a DEC salesman who told someone

          You're lucky you got a DEC salesman to tell you anything price-related. We were a huge customer of theirs, but any request for a price was always responded to with "we'll send you a quotation", even if we just wanted a quick ballpark-figure to know if the new XXX system was closer to £100K or to £200K (we were quite capably of doing the discount calculation ourselves).

          We eventually found it quicker to call the receptionist and tell her "we don't want to bother Mxxxxx, I'm sure he's busy, can you take a quick look at the pricelist and tell me what XXX costs". Great girl, she always came through :)

        2. I ain't Spartacus Gold badge

          Re: One-to-One?

          (Not quite as extreme as a DEC salesman who told someone trying to order a microvax that for the job they wanted it for then a cheap PC plus an Ethernet card was a better solution and there was no need to buy anything from him)

          I do that all the time. I believe in some sales training they call it the difference between farmers and hunters. Or some such bollocks.

          We as a company are trying to maintain a reputation. Thus lots of people phone me with technical questions about how to do stuff legally and safely (I'm in the water industry). If we have a product to help, I can then try to get them to buy it. Our reputation for technical competence means we can get away with selling some stuff more expensively than our competitors (so it does the job properly and doesn't have to be built down to a price), although quite a lot of our stuff is unique.

          It gets people coming back. Probably it gives people confidence that I know what I'm talking about, if I'm not bullshitting to get them to buy something all the time. Selling is what you do when you know what the project actually requires, and are now getting down to how much to pay for whatever solution they've picked. It's either that or my wonderful personality... [insert simley face here]

          On some of our stuff we compete on price on commodity hardware, which is a bit different.

          The friend of mine who had the sales training about hunters and farmers worked for Computer Associates (before they were CA). They were definitely Hunters. I don't think having happy customers who'd want to come back was an objective of theirs. Although I'm not so sure about tying unhappy customers into long contracts...

  7. The humble print monkey

    Yota2

    On a selfish note, will I be able to get me a two faced toy for Xmas?

  8. Fred Dibnah Silver badge
    Thumb Up

    Apple = Magrathea?

    "The Magratheans went into hibernation, awaiting an economic recovery that could afford their services once more. Magrathea itself disappeared and its memory soon passed into the obscurity of legend."

    (from the Hitchhiker Wiki)

  9. Gis Bun

    Oh well. I'm still waiting for an uprising in Russia .... over Apple shutting its doors.

    They could sell in a more stable currency like the Euro or [heaven forbid!] the Us dollar. But I guess not.

  10. ZanzibarRastapopulous

    10 dorrar?

    Apple needs to learn a trick from Vietnamese prostitutes and price their offerings in dollars.

  11. caffeine addict Silver badge

    So, if gas & oil are at a low, doesn't that make it the perfect time for European countries to block all Russian gas imports for a while until they piss off out of the Urkraine?

    A bit more lost gas revenue sounds like the perfect way to focus their attention.

    Or start WWIII, I guess...

  12. Mutton King
    Thumb Up

    Why close?

    just price in bitcoin.....

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